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Move Over China: India's the Best Place to Invest Right Now

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  • (1:30) - Apple to begin iPhone manufacturing in India
  • (6:15) - Tesla speculates opening the doors into India's Market
  • (9:15) - Internet Expansion in India       
  • (13:35) - Amazon's Big Investment into India
  • (21:30) - India's influencing infrastructure
  • (25:25) - Stock Re-cap

Welcome to Episode #70 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Neena Mishra, Zacks Director of ETF Research and also the editor of Zacks Income Investor.

But she’s not on the show this week to talk about ETFs or income stocks. No, she’s joining Tracey to discuss a far more important topic: the investing opportunities in India.

Neena just returned from a trip to India where she noticed that there was a lot more optimism about the economy.

Prime Minister Modi has been trying to institute economic reforms to open up India’s economy, which has been notoriously closed off to foreign investment. Given the developments over the last few years, it looks like he is succeeding.

While many American technology and social media companies are shut out of China for various reasons, India has seemingly opened its doors. With 1.2 billion people, and growing, many companies would love to tap that consumer base.

With one of the largest populations of Millennials in the world, and a growing middle class, 2017 could be the year of India.

Tracey and Neena discuss 5 ways in which investors can invest in India’s rising economic power, without even leaving the shores of the United States.

5 Stocks to Play the Indian Growth Story

1.     Apple (AAPL - Free Report) only has 2% of India’s smartphone market. Estimated at 300 million, and growing, that’s just a small sliver of the market. But until 2017, it hasn’t been able to open Apple retail stores in the country. Thanks to a deal to manufacture the phones in India, which will bring costs of the phones down for consumers, Apple could soon be tapping India’s growing elite.

2.    Tesla(TSLA - Free Report) appears to be poised to enter the India market after CEO Elon Musk tweeted out in February 2017 that it is looking to enter India in mid-2017. There are also rumors that a long-awaited Tesla Asia manufacturing plant may get the green light in India, instead of China. Stay tuned.

3.    Facebook has long been shut out of the massive Chinese market, but that’s not the case in India. One problem in India, however, has been the poor Internet infrastructure. There are just 250 million data subscribers, although that number is growing quickly. In 2016, Facebook tried to give away the Internet in India but was shot down by the government. However, data companies have been quickly expanding which is helping Facebook’s reach. In the fourth quarter of last year, India was Facebook’s fastest growing market.

4.    Amazon(AMZN - Free Report) has put the most on the line in India as it has already spent about $5 billion to expand its fulfillment centers and delivery service in the country. Amazon Prime has launched in 100 cities. 10% of India’s population speaks English, which makes it the second largest English speaking country, after the United States, in the world. It’s facing competition, however, from Alibaba and homegrown FlipKart and Snapdeal. But it has launched Amazon Video and a recent 3-day Great Indian Sale saw sales growth surge over 200% compared to a regular shopping day.

5.    Netflix(NFLX - Free Report) has an aggressive international expansion plan, and it includes India. In December 2016, just as Amazon Video launched, Netflix announced a partnership with Bollywood movie star and producer, Shah Rukh Khan. Right now, Neena says Netflix is charging around $10 a month for its streaming service. That is high for India. But, again, companies are looking at the growth potential.

What else should you know about India and investing in its hot growth story in 2017?

Find out the answers to this and more on this week’s podcast.


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